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Help to Buy scheme brought forward by David Cameron

David Cameron has promised to launch the Help to buy scheme with mortgages up to 95% loan to value.

Cameron is keen to extend the possibility to a wider range of buyers to access mortgage loans of up to 95% of property values but rejected concerns that this could lead to an unsustainable housing bubble.

The Halifax, Royal Bank of Scotland and Natwest, have already agreed to participate with the Help to Buy scheme, but other lenders such as  HSBC, Santander, Nationwide and Barclays have not yet committed to the scheme.

How Help to Buy works

Under the first phase of Help To Buy launched in April, the government will give homebuyers in England equity loan worth up to 20% of the purchase price, but they will need to fund a 5% deposit form their own funds.

A 75% mortgage will fund the balance of a new property worth up to £600,000.

Help for first time buyers can come from family members as the equity release buyer can access money using a lifetime mortgage gifting the deposit to a child or grandchild for their first home.

The second phase of Help to Buy, will see the government underwriting 15% of the value of a mortgage to the lender. People can purchase a property with a 5% deposit although must have a 95% mortgage from a lender for the balance.

The Help to Buy scheme is not available to switching remortgage buyers or buy-to-let investors as it supports new home ownership to people struggling to get on the property ladder.

Overheating housing market

The Bank of Enabled has been given responsibility for seeing how the scheme affects house prices. The first report will be next September 2014 which is two years earlier than expected.

The £600,000 limits may also be capped for the London region to reduce its impact in London.

Ed Balls has declared that the housing market is already overheating and that the second phase should be reviewed now.

Mr Balls insist that the only way in which overheating can be addressed is to increase house building and increase the housing supply.

The lack of suitable properties on the market at an affordable price for home movers means they must continue renting and saving for a bigger deposit.

What are your next steps?

Talk to our London City Mortgage advisers if you are an older homeowner releasing equity from your property, we can recommend the lifetime mortgage to access wealth to consolidate debt, home improvements or gifting to a family member.

Learn more by using the equity release calculator, property value tracker chart and mortgage monthly cost calculator. Start with a free mortgage quote or call us and we can take your details.

At LCM our mortgage brokers can provide advice if you are a first time buyer, moving home, want to remortgage your existing home to a new cost effective mortgage deal or are a buy-to-let investor.

Use your dashboard to access online mortgage quotes, money off vouchers and start your mortgage application online 24/7 on desktop, tablet or smartphone.

Mortgage Best Buys

These are examples of mortgage products we can approach with many more offering interest rates and flexibility to meet your needs.

1.16% Fixed Rate
60% Loan to Value
£1,525 App Fee
Until 01/11/2022
Reverts to 4.09%
1.18% Fixed Rate
60% Loan to Value
£1,034 App Fee
Until 31/10/2022
Reverts to 3.59%
1.17% Fixed Rate
60% Loan to Value
£1,025 App Fee
Until 31/09/2022
Reverts to 3.59%
1.19% Fixed Rate
60% Loan to Value
£999 App Fee
2-Years Time
Reverts to 3.59%

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    Equity Release may involve a Lifetime Mortgage or a Home Reversion Scheme. To understand the features and risks, please ask for a personalised illustration. Equity Release may affect your entitlement to means tested state benefits and will impact on the size of your estate. For Equity Release London City Mortgages charge a fixed fee upon completion of £695. For Mortgages a fixed fee is charged on application. Typically this is from £295 up to £495 for the services selected.


    Equity Release - Equity Released from your home will be secured against it. Mortgages – Your home may be repossessed if you do not keep up repayments on your mortgage or other loans secured against it. Think carefully before securing other debts against your home. The information contained in this website is subject to the UK regulatory regime and is therefore intended for consumers based in the UK.


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